The general ledger is where all of a company’s accounting system information and records come together, and where all transactions are posted. It is also where the financial statement information (balance sheet, income statement and statement of cash flows) is drawn from. The general ledger must be kept in balance and up-to-date in order for the accounting records to be complete and accurate.
Determine if the general ledger is in balance. Periodically, usually monthly, a company’s books will be balanced and closed. This means that any necessary adjusting entries are made to balance the general ledger. The financial statements are drawn from the general ledger. Closing entries are made to establish the beginning balances for the next period--that is, update the general ledger. Closing entries should not be made until the general ledger is in balance for the current period. If beginning balances are incorrect for subsequent periods, they will continue to be so for all succeeding periods until the correct adjustments are made.
Run a trial balance report showing beginning balances and ending balances. If the beginning balance totals do not equal zero, run the trial balance report again. The period where the beginning balances equal zero is where the out-of-balance problem first occurs.
Using the date range in question, print the general ledger detail source report for all journals and batches.
Review the general ledger detail source report and identify any entries that aren't double-sided. When you find an entry that is not double-sided, you will need to refer to the original print-out of the register to identify which portion of the entry is missing.
A one-sided entry will be needed to enter the missing portion of the entry. To make a one-sided entry, you will probably need supervisory rights to system.
To make the adjusting entry in the general journal, enter the original journal, batch number and posting date from the register. In the data entry fields, enter only the accounts and data that are missing. Once these entries are complete, print the general journal and update.
Confirm that you are no longer out of balance. Compare the ending balances for the trial report for that period.
Repeat the entire process for each subsequent period until you reach the current period and are no longer out of balance. Going forward, you should only need to work with the current period, since you have corrected all prior periods and won't close the books without first balancing the general ledger.
It should be noted that the general ledger can balance and still be incorrect, this happens when debits equal credits but postings have been made to the wrong accounts.